At the beginning of Wednesday's European trading session, the dollar attempts to recover from Tuesday's collapse. Judging by the slight increase in its DXY index after such a significant decline, market participants are not in a rush to buy the dollar, counting on a rebound from the zone of key support/resistance levels.
For example, in pairs with the yen and European currencies, the dollar has still strengthened slightly since the opening of Wenesday's trading day, while in pairs with the Australian and New Zealand dollars, it continues to weaken.
These currencies received support from the statistics published at the beginning of the Asian trading session from China, reflecting an increase in industrial production volumes from 4.5% to 4.6% in October and retail sales from 5.5% to 7.6% (year-on-year). Moreover, the actual indicators turned out to be better than forecast estimates.
China is the largest buyer of raw materials and a supplier to the global commodity market of a wide range of finished products. Moreover, China is the largest trade and economic partner of Australia and New Zealand and a buyer of their raw materials. Therefore, positive macro data from the country with the world's second-largest economy also positively impact the dynamics of the currencies of these partner countries of China.
Thus, the NZD/USD pair rose 2.3% on Tuesday, rebounding from a two-week low at 0.5858 and reaching a local high since October 13 at 0.6013. Since the opening of Wednesday's trading day, the NZD/USD pair is again growing, reaching 0.6036 as of this writing, probably aiming for the key resistance level of 0.6065, separating the medium-term bearish market of the pair from the bullish one.
At 13:30 (GMT) on Wednesday, when a block of important macroeconomic statistics from the United States will be published, volatility in the quotes of the dollar and the NZD/USD pair will sharply increase again. Among other data is statistics on the dynamics of retail sales in the United States and prices of American producers.
As for the New Zealand dollar, the next important news will come at the end of the trading day on Thursday when, at 21:45 (GMT), the indices of purchasing and selling prices of New Zealand producers for the 3rd quarter will be published. Here, there is a sluggish dynamics of a slowdown in the growth of selling and purchasing prices, which indirectly indicates a slowdown in overall inflation in New Zealand. Another set of weak indicators can exert negative pressure on the NZD.
In this case, the return of the NZD/USD to the zone below the important level of 0.6025 may provoke a resumption of the pair's decline. However, the main attention here should still be paid to the overall dynamics of the U.S. dollar.